MSE News: House asking prices rise to unrealistic levels 16 May 2011 at 9:59AM in Mortgages & endowments 15 replies 2.4K views

Former_MSE_Guy

This is the discussion thread for the following MSE News Story:

"House asking prices have risen to their highest level for nearly three years, with some owners demanding sky-high sums ..."

Read the full story:
House asking prices rise to unrealistic levels

rickbonar

So how do explain all the SOLD labels appearing in the press and house windows then?

Anyway all the house prices are unrealistic at the moment so I guess they figure you might as well ask for more!

(ready for when the market "recovers")

smcqis

All house prices cant be overpriced, as this would be the market! Some or most maybe however

Percy1983

Just form keeping an eye locally I can see houses which are over priced and have been there for months/years, meanwhile properties with a reasonable price sell within a few months and bargain properties go in weeks.

I do look at some of the overpriced houses to see if I am missing anything, no there is nothing special the clearly just don't want to sell.

CloudCuckooLand

Sounds like a continuation of the situation from November, when London asking prices were 24% above sold prices.

The asking price does not mean much if buyers are widening the gap on their offers too, as the same sold price results.

If anyone spots a more recent "gap between selling and asking prices" report, it would be interesting to see that.

Gorgeous_George

There could be another reason (or two) albeit a bit of a long shot.

Maybe wealthier people can afford to move but poorer people cannot (EA fees, legal fees, Stamp Duty etc.). The wealthier people put more expensive houses on the market and poorer people NEED more than their homes are worth to finance a move. Either of these situations would see asking prices rise.

The only figures that matter are the sold prices.

GG

Malky

Some could be sellers who bought in 2007/08 at the height of the market with little in the way of a deposit. Then there's the realisation that houses prices actually fall rather than rise thus needing to claw back as much as they can before they move on.
For instance, I know if I'd bought my house in 2007 rather than 2006 and decided to sell now then I'd be down by about £15K. Some people refuse to believe their house could be worth less than what they paid for it thus setting unrealistic asking prices.

brian_723

I am in no hurry I will keep saving even more , as I can wait for the bubble to really burst .I am not going to miss the boat on this one, incomes are falling unemployment is rising .I will not buy at these prices .The price of property does not tally up with the state of the economy .

noodle

brian_723 wrote: »

I am in no hurry I will keep saving even more , as I can wait for the bubble to really burst .I am not going to miss the boat on this one, incomes are falling unemployment is rising .I will not buy at these prices .The price of property does not tally up with the state of the economy .

You're right to an extent, but remember that a house is a long-term asset, and so the long term prospects for the economy are relevant.

There are two problems suppressing prices right now.. employment uncertainty (which is overstated) and deposit requirements for FTB's (a real issue). Houses still seem too expensive relative to incomes.. but that wasn't a problem prior to the other issues arising, and I see little evidence of a shift in the general culture to overspend on houses. I think that people would be happy with current prices if they could get the mortgages.

Unless there is a dramatic downward shift in the economy, people will stop fearing for their jobs. If lenders conditions creep back towards the olden days (100%+ mortgages aren't likely, but more 95% deals and, even, schemes to facilitate the remaining 5%) then the market may well stabilize. Similarly, those who've now been saving for 3-5 years for a deposit will be reaching the point where they can take the plunge.

Paulgonnabedebtfree

rickbonar wrote: »

So how do explain all the SOLD labels appearing in the press and house windows then?

Anyway all the house prices are unrealistic at the moment so I guess they figure you might as well ask for more!

(ready for when the market "recovers")

I'm not saying this is the case but estate agents are well known for converting a "for sale" sign to a "sold" sign pretty much as soon as they get an offer - regardless of whether this offer ends up being accepted. This is because it's good advertising for them.
I tend to notice things like this as I have quite a few customers (I clean their windows) who want to sell. The boards seem to be switched each time I go there. Some have been trying to sell for a year or two and on most of my visits, the sign reads "sold". It hasn't been though.

rickbonar

I did actually write it a bit tongue in cheek because I have seen quite a few such signs ... and interestingly a few weeks later the places are back up For Sale.. now it's either a rapid resale or estate agent kidology to fool sellers and buyers into thinking it's time to get in!